Summary
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- California’s newly enacted S.B. 122 expands sales and use tax to cover electronically delivered or remotely accessed digital products, including prewritten software, effective January 1, 2027.
- Taxable transactions now include the transfer of rights to access, download, store, update, manipulate, or otherwise use qualifying digital products, whether temporary or permanent.
- The longstanding exemption for custom software remains unchanged, preserving the distinction between custom-developed and prewritten software for tax purposes.
Source Deloitte
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